"Confidential" press release reports on British IP Crime

"Car boot sale? I thought the advert said 'Cat boot sale'"

Yesterday's press release from the United Kingdom Government's Department for Business, Innovation and Skills brings good-ish news for IP owners, following publication of the IP Crime Group's 67 page IP Crime Report 2010-11:

"New report shows successes of tackling intellectual property crime

More people than ever before are being successfully prosecuted for committing intellectual property crime in the UK according to a new report ....

Intellectual Property (IP) crime is the counterfeiting of trade marked goods such as clothes and the piracy of copyright material such as CDs and DVDs. The annual IP report, published by the IP Crime Group, reveals the actions that are being taken by the Intellectual Property Office (IPO) and partner agencies to fight those breaking the law. 

The report highlights that 75 per cent of all criminal copyright cases end in a positive conviction. It also reveals that 80 per cent of all IP crime cases result in guilty plea prosecutions against the defendants.[These figures are gratifying, but they will be more meaningful when we also know how many cases are not prosecuted on account of evidential problems or lack of resources with which to prosecute ] 

The report shows an increase in the sale and distribution of counterfeit and pirated goods over the internet and auction websites during the last 12 months [this is unsurprising, though the figure can be expected to fall as legal downloads become cheaper and more people indulge in file-sharing], while there has been a fall in IP crime at sites such as outdoor markets, although that still remains a problem area [quite right: the rainfall can be quite unpredictable in the British Isles, though it always rains on Sunday]. ...

The report lists goods seized and activity carried out by a range of organisations across the country. It also highlights the value of the Proceeds of Crime Act (PoCA) to fighting piracy and counterfeiting. The Act allows enforcement agencies to apply for money made from criminal activities to be confiscated. A 2009 MORI poll found that over 85 per cent of people support recovering assets from criminals [Merpel wonders whether this shows that over 14% of people are the criminals ... ]. 

In May 2010, London Borough of Enfield Trading Standards secured an £11 million confiscation order, one of the largest ever secured by a local council under PoCA. It followed the prosecution of a local man in February 2008 after 30,000 pairs of counterfeit Burberry shoes were seized [Hmm. Could this have been a bulk order for Imelda Marcos?]. The subsequent PoCA investigation revealed the defendant was also involved in a £72 million VAT Carousel fraud. [Why, Merpel wonders, would anyone in Enfield want to pay good money for counterfeit products when sadly, it seems, they can help themselves to genuine goods for free?] 

Other examples of significant cases involving IP crime include: 

• Six members of a group, who used high-tech equipment to produce 24 fake bottles of vodka [a small, pedantic voice is stifled in the act of crying out "Shouldn't that be bottles of fake vodka ...?"] a minute, were jailed for a combined total of 56 years in July 2010. More than 1.3 million litres of the illegal vodka was made in a warehouse in Hackney, East London, with an estimated value of £16 million. Confiscation proceedings are now underway. 

• A graduate from London was found guilty of breaching copyright by illegally recording films in cinemas. A mobile phone was used to record the films which were uploaded to the internet and made available to others to watch them or burn them onto illegal DVDs across the world [What a sad waste of a good mobile ...]. 

• Fake cigarette lighters [an even smaller pedantic voice is throttled before it can ask whether these are genuine lighters for use with fake cigarettes, fake lighters for use with genuine cigarettes or ... never mind!] displaying the Olympic symbol and stating London 2012 were discovered at car boot sales in Coventry. The London Olympic trade mark and the symbol of the Olympic Rings are protected trade marks, and steps are being taken to trace the supply of the lighters. Genuine London 2012 games merchandise will include a numbered holographic version of the official logo as part of the packaging or labeling. ...

Giles York, IP Crime Group chairman and Deputy Chief Constable of Sussex Police said:

“Intellectual property crime is a real and serious threat to UK companies and consumers alike. This report highlights organised criminal methodologies and the dangers posed in fake products. The recently published IP crime strategy outlines plans for tackling criminals, disrupting the supply of pirated and counterfeit goods and reducing the incentives for IP crime”".

The report is full of statistics relating to types of goods counterfeited and regional prosecution activity. The IPKat, who is no statistician, will be happy to receive guidance from his readers as to what the figures mean and whether things are as grim in Scotland as they might appear to be.  Merpel says, never mind the Report, just look at the copyright notice on the BIS press release. It reads like this:

"© Crown Copyright 2010

This communication from the NDS [News Distribution Services] is confidential and copyright. Anyone coming into unauthorised possession of it should disregard its content and erase it from their records".

Do all media releases from the government's News Distribution Services come with a "confidential" notice, asks the IPKat, or only those that contain information which is intended for publication? And why '2010', both cats wonder? Is the NDS looking back fondly to better times?

Leaking secrets here
Leaking boots here

Lock them up or make they pay?

What shall we do with them?
(photo by hmmlargeart)

The IPKat put in four 16-hour days at the recent International Trademark Association Meeting in San Francisco, but was still unable to cover more than a small amount of the programme.  He is therefore grateful to his friend and fellow blogger Aurelia J. Schultz for providing him with this note on one of the Table Topics which she attended:

"Counterfeit Goods, Civil Liability and Criminal Punishment 

Lock them up or make them pay? An international group of lunch munchers explored the various considerations in this choice at one of this year’sINTA Table Topics: The Intersection of Criminal Prosecution and Civil Trademark Enforcement, moderated by Michael J. Allan of Steptoe & Johnson LLP. In opting for one or other option, there are two main questions to ask: What do you want?  How likely are you to get it? 

What do You Want? 

In China, a successful criminal prosecution will get you the satisfaction of jail time for the defendant and a guarantee that confiscated counterfeit goods will be destroyed on 15 March, National Customs Day, when all confiscated counterfeit goods from across the country are destroyed.  It will not however, get destruction of the machinery used to produce the counterfeit goods and it will not get the trademark owner any money.  In the US, a successful criminal prosecution can include money for the trademark owner in the form of restitution, but the amount is far less than possible damages in a civil suit. 

Occasionally, it may happen that law enforcement begins a criminal investigation before the trademark owner brings a civil suit.  Things can get a little tricky when both cases wind up in the court system at the same time.  In the United States, the common procedure is for the defendant to ask for a stay of the civil proceedings until the criminal proceedings are complete.  Whether the court grants this stay can greatly affect the procedure of the civil case; thus the plaintiff needs to decide whether to argue in support of or against the stay.  A stay can make things easier for the plaintiff in the civil case because the government will do a large part of the discovery work through its investigation.  Plus, if the defendant is found guilty in the criminal case, that can be used to show liability in the civil case.  However, not having the stay can also benefit the plaintiff in the civil case by forcing the defendant to make some tough decisions.  Under the US Constitution’s Fifth Amendment, the defendant has a right not to testify in a criminal proceeding.  But, if he chooses to testify in the civil case, that right is considered waived.  In Latvia, there are no choices to make; the stay is automatic. 

How Likely are You to Get it? 

One notable consistency across the countries, if you want criminal enforcement, you’re probably going to have to do the dirty work yourself.  Governments are short on resources, money, time and personnel.  In the United States, trademark owners who want to close down counterfeit operations are more likely to get results working with the local law enforcement and prosecution offices, rather than with any of the various federal agencies.  In China, success is more likely with engagement of officers at higher government levels, most notably the Ministry of Public Security.  Local decision makers are often friends with the counterfeiters. 

Convincing law enforcement to get involved can be challenging, even if you’re able to foot the bill.  Generally, you need to show that involvement in your case benefits the greater public.  In the United States, all you have to do is find some way to persuade law enforcement that this counterfeit goods operation is linked to terrorism.  In Latvia, the sell is a little more difficult unless the counterfeit good is physically dangerous; loss of tax revenue is often the best point.  But there are also some places where the convincing is not as needed.  In Latin America, criminal prosecution is the standard for trademark infringement and counterfeit goods.  Civil cases just take way too long.

So when do you go for the money, when do you try for criminal enforcement and when do you have to choose?  Generally, you go for the money when you want money and you go for criminal enforcement when you are dealing with repeat counterfeiters and want the whole operation shut down, provided you can find a willing government partner and do some funding.  [Which  brings up a very interesting question about access to justice, but I’ll leave that for the comments section…]".